I disagree that movies are defined by the story. Sure, with critics, but spectacle is still what sells the movie. Avatar? Basic movie story with lots of cool spectacle. Titanic? All spectacle. That story is basic as hell. Hit the basic tried and true, add in spectacle and make money. As awesome as the stories of Inception and the Matrix were, it was the spectacle that brought in the money. I can keep going with Jurassic World, etc, etc, etc. The goal is to have a story that makes some sense, is adequately penned, and adds tons of spectacle. Movies are the visual spectacle and books are for stories that can be more easily fleshed out.
I should have expounded--I think movies are defined by the most
effectivestory, along with a high baseline of spectacle. For example, you brought up one; Avatar. Very, very basic new-world, hero's journey story--been told a million times, from Pochantos to Dances. Or, because Cameron is so good at it, Titanic. Romeo and Juliet, been told a million times, the story telling practices are all
well defined. And so while you're right those movies had very simplistic stories, they were very effective and well executed in the film, and thus didn't get in the way of us enjoying the spectacle.
But yeah, spectacle is what brings in the money, it always has; but what we define as a "great" or memorable film has spectacle+very effective story telling...It doesn't have to be great story telling, but simply clear, concise, easily to follow story telling (Stories that are easy to enjoy and won't have you questioning the spectacle on the screen.)
So, Transformers can make money with spectacle. But it will never been considered a great movie because it didn't execute the story well (Often times the "story" got in the way and felt clumsy). Meanwhile, Titanic's story is
every bit as simple as Transformers, but it was executed cleanly, and by the book; it didn't take away from the spectacle. I think, for the most part, that is what audiences look for in order to make a movie memorable. Not that the story is good enough to leave them thinking "wow that's a great story" (Shit doesn't have to be Godfather), but rather than the story is clean and effective and concise enough to NOT leave them thinking "you know the X or Y visual in the movie was cool, but why did A or B happen, it makes no sense." So in that way, stories, at least in my opinion, are the defining factor of what turns a movie from a block buster, into a "good/great" film. (Mad Max is probably the best recent example of this.)
But meh, just my opinion. As you said, Lucas' issue was that he let his desire for a "great" story get in the way. He'd have done much better with a simpler, more effective story and played to his strengths...Because he was never going to achieve that "great and complex" story telling that he wanted, and because he wasn't good enough to push it to there--his story could only hamper what he was trying to show off on screen (IE his completely digital sets--which, imo, the technology wasn't even close to ready to do at the time anyway.)